Harmonized inflation rises but remains below target in April

Latest reading: Harmonized inflation inched up to 1.9% in April, following March’s 1.8%. April's result represented the highest inflation rate since October 2023, but was among the lowest in the Euro area and remained below the ECB’s 2.0% target. Looking at the details of the release, prices for food and non-alcoholic beverages rose at a faster pace in April, and transport costs rebounded. On the flipside, prices for housing and utilities rose at a softer pace. As a result, annual average harmonized inflation rose to 1.3% in April (March: 1.2%). Meanwhile, consumer price inflation was stable at 0.5% for the third straight month. Lastly, harmonized consumer prices rose 0.15% in April over the previous month, which was slightly above March's 0.13% rise.

Panelist insight: SEB’s Mihkel Nestor commented: “Weak demand has pushed down headline inflation, which has hovered around 1.7 per cent in recent months. Core inflation is somewhat higher at 2.5 per cent. We expect the inflation rate to ease further this year before edging up to just below 2 per cent in 2026 as domestic demand gradually increases.”

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